Explanation:

Revenue Receipt
The term “Revenue Receipt” is made up of two words revenue and receipts. Any income that does not generate a liability is revenue. For example, if the Government borrows money from World Bank, it will increase its liabilities (because this money has to be paid back)- so cannot be called revenue. However, if the government gets the same money has grant (donation), its revenue receipt because grants are not to be paid back.
Taxes are the most important revenues receipts of the governments. However, some revenue receipts are non-tax revenues such as grants. On this basis, revenue receipts are of two types viz. Tax Revenue and Non-tax revenue.
Tax Revenues
Tax revenues are either from direct taxes or indirect taxes. Direct tax generally means a tax paid directly to the government by the persons on whom it is imposed. Income Tax, Gift Tax, Wealth Tax and Property tax etc. are direct taxes. Indirect tax is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer). Sales tax, Value Added Tax (VAT), Goods and Services tax (GST) or any other such tax is an indirect tax. Largest chunk of tax revenues of government of India currently comes from Corporation Tax, followed by Income Tax, followed by Union Excise duties, customs and thereafter service tax. The collection of service taxes is increasing over the last years. The amount collected under Direct Taxes (Corporate/ Income/ wealth) is larger than that under Indirect taxes.
Non-Tax Revenue
Non Tax Revenue Receipts are those revenue receipts which are not generated by Taxing the public.
Money which the Government earns as “Dividends and profits” from its profit making public enterprises (PSUs).
Interest which the Government earns on the money lent by it to external or internal borrowers. Thus this revenue receipts may be in foreign currency as well as Indian Rupees.
The money which the government receives out of its fiscal services such as stamp printing, currency printing, medal printing etc.
Money which the Government earns from its “General Services” such as power distribution, irrigation, banking services, insurance, and community services etc. which make the part of the Government business.
Money which the government accrues as fees, fines, penalties etc.
Grants the Government of India receives from the external sources. In case of the state Governments, it may be the internal grant from the central Government.
In recent times, spectrum auctions have been one of the major sources of non-tax revenues for the government. We note here, that despite it looks that spectrum amount should be a capital receipt, it is shown as a non-tax revenue receipt in budget documents as one time spectrum charges levied on telecom players.
Capital Receipt
A receipt that results in either reduction in government assets (sale of share, disinvestment) or increase in some liability (government borrowings) is a capital receipt. These receipts are NOT a part of normal operations of government business. Capital Receipts include market loans, external loans, small savings, Government Provident Funds, Accretions to various Deposit Accounts, Depreciation and Reserve Funds of various departments like Railways.
The Capital receipts are of two types viz. Debt receipt and non-debt receipts. The debt receipts are those which government needs to repay along with interest. Non-debt receipts are those which come to the government by sale of some assets. Most of the capital receipts of the government are debt receipts and are shown as liabilities of the Government’s balance sheet.
Borrowings by the Government
The Government borrows from domestic as well as foreign sources. All borrowings are called capital debt receipts. However, interest paid on such borrowings is placed under Revenue expenditures. It’s worth note that Government of India is the largest borrower in India and the market borrowings are the largest source of capital receipts of the Government.
Government raises its market loans by selling dated government securities by Auction since 1992-93. These auctions are conducted by the Reserve Bank of India, as debt manager to the Central Government. These bonds are of either fixed interest rate (called Fixed Coupon Securities) or of floating interest rate (called Floating Rate Bonds (FRB)). Apart from these, Government also issues short term money market instruments viz. 364/182/91 days Treasury Bills. These treasury bills offer short-term investment opportunity to financial institutions, banks, etc. Finally, government also issues Cash Management Bills, which are issued to meet the temporary cash flow mismatches of the Government. The Cash Management Bills are issues only when Government needs a short term cash. Thus, the maturities of the Cash Management Bills are always less than 91 days. The above borrowings are from the market. Government also borrows from common people like all of us in the form of small saving schemes. At present, the active small saving schemes are as follows:
Post Office Saving Account
Post office fixed deposits of 1, 2, 3 & 5 years
Post Office RDs (Recurring Deposits)
Post Office Monthly Income Account
Senior Citizens Saving Scheme
National Saving Certificates Public
Provident Fund (PPF)
Sukanya Samriddhi Account
Kisan Vikas Patra
Monthly Income Scheme
The money of all of these goes to National Small Savings Fund. This fund is a part of Public Account of India and is active since 1.4.1999.All withdrawals are also taken out of this fund. What remains as balance in the fund is invested in the Central and State Government Securities. How should be these invested and in which securities, this is decided by the Government from time to time. At present, the term of Central and State Government Securities is 10 years, 9.5 per cent interest rate. Then finally, government issues savings bonds for people to invest in them. There are two kinds of Bonds viz. Tax Saving and not Tax Saving. Obviously the interest rate in taxable bonds is higher.
Miscellaneous
Capital Receipts Miscellaneous Capital Receipts refers to the money receipt by disinvestment of the public sector companies. This money comes from sale of government share / equity in public sector companies. In 2013-14, Government received around Rs. 40,000 crore in lieu of sale of its shares in Hindustan Copper, ITDC, MMTC, National Fertilizer, Neyveli Lignite, State Trading Corporation Ltd, Power Grid Corporation of India Ltd, NHPC Ltd, Indian Oil Corporation, Engineers India Ltd, BHEL, Hindustan Aeronautics Ltd. The money from this disinvestment earlier used to go to ‘National Investment Fund’ (NIF). Currently, this fund is merged with the Public Account of India and these proceeds are maintained in the public Account as a separate head – NIF. The Money from NIF is used for several purposes as decided by the Government. These include recapitalisation of Public Sector Banks’, investment in Indian Railways, investment in other public sector units towards capital expenditure.
Loan Recovery
The money which the Government of India had lent in the past to the states, to the PSUs and to the Union Territories, and to the parties and Governments abroad, when recovered back, are called Capital Receipts. Here, please note that Loan recovery is Capital Receipt but the interest received on these loans is revenue receipts.